Libertex’s Ghost Commissions

This is the case of when Libertex Chile charged me with a ghost commission equivalent to 60% of the trade’s capital.

I want to start stating that the ticker symbol $ACB which I traded was recommended by a Libertex’s trader in their live YoutTube channel.

On Monday 9th November I made two short trades on ticker symbol $ACB. The first one at 14:36 GMT for USD$3525 and a multiplier of x10 and the second one for USD$688x1. On both trades I was charged with a base commission of 6.02% when their commission specification states that it should have been 0.01%.

Commission of -0.01% on $ACB.

The first trade started USD$-2122, because of the commission charged and was closed 3 minutes later at 14:39 GMT for a total loss of USD$2836 due to the stop out of 80%. During the first 15 minutes after making the trade, $ACB had dropped 7% and at 15:05 GMT it had fallen 15%.

Detail of the trade: opened on 9th November 14:36GMT at $12.80 and automatically closed 14:39GMT on the same day for a total loss of 80.47% of the capital.
$ACB graph on 1 minute candles. You can see I made the short trade and 3 minutes later it makes a little pullback, closing automatically the trade and 6 minutes after it closed, $ACB dropped 7.7%.

On the same day I reported this to the customer service of Libertex and during the next days and weeks they couldn’t give me a reasonable answer. They told me that they have a floating commission that depends on market conditions. When I ask for a mathematical formula to explain the commission they gave me a recursive formula, from which I can’t do absolutely nothing for future trades.

Libertex’s answer upon asking for a math formula. Translation: “At the moment there are no high commission warning alerts on the platform. We appreciate your comment regarding the handling of commissions on the Libertex platform, your comment has been recorded and will be transmitted to the team responsible for the development of the platform. The formula to calculate the % of the commission charged is: Commission in USD / (Volume x Multiplier)”

The formula that they gave me is:

% Commission = Commission in USD / (Volume x Multiplier)

I have the following questions about this formula:

  1. What volume are they talking about? The volume of the previous day? From the same day that I am trading? What volume?
  2. How do I effectively calculate the commission on future trades so this doesn’t happen again?

Also, you can notice that the volume and multiplier are dividing the commission… So as the volume grows bigger, the commission should be lower? What if I use an “infinite” multiplier, I don’t have to pay for commissions?

Upon insisting that the formula they gave me makes absolutely no sense they answered me with “We do not have a formula to calculate the charged commission before making the trade”.

Libertex’s answer when insisting the formula doesn’t make sense. Translation: “The formula that we give you is a formula to calculate the % of the commission already charged in an operation that was opened. We do not have a formula to calculate the amount of commission that you will be charged for each transaction. The commission is floating and will depend on the amount invested, multiplier, instrument, situation in the market, etc”.

Wait… WHAT?? They DON’T have a formula to calculate the commission BEFORE I make a trade?

At this point I was demanding to speak with someone that actually knew what was going on here, because it looks that even the client support team didn’t know how to calculate the commissions charged.

Two weeks after the trade and a continuously insistence, the 27th November @Gabriel Peñalillo, the Chilean Manager of Libertex calls me. While speaking with @Gabriel, he mentions that they had clients that had the same problem with this ghost commissions and answered that “this things happen” and they don’t assume any responsibility.

During the conversation, @Gabriel mentions constantly the risk managing subject. He repeatedly stated that it was 100% my fault that I didn’t manage correctly the risk on the trade to what I answered “how do you expect me to make a correct risk manage analysis when the platform hides me the commission you are charging me?”

It’s clear that Libertex’s users can’t do a proper risk management analysis if the platform doesn’t provide the minimum information to do so.

At the end of the conversation with @Gabriel, I asked him upfront if they were going to give me back the capital I lost due to this anomaly in their system and he said that it was impossible for them to do that. He told me that we should continue talking on Monday to “negotiate” a compensation for this case. He had offered me 3 risk management classes with the same trader that recommended $ACB.

@Gabriel didn’t call me on Monday or any day. He hasn’t tried to contact me ever since.

It’s super clear that the ghost commission they charged me on this trade was the main cause of the lost capital. If the commission was explicit then I wouldn’t have chosen the multiplier I did (maybe even I didn’t make the trade due to the high commission) and in the other case, if the commission was the one explicit in their specification, I would have made at least USD$250 (with multiplier x1). Instead, I lost USD$2836.

Also it’s clear that Libertex doesn’t care about their clients or the safetiness of their capital’s management. They took two weeks to contact me after the ghost commissioned trade, they didn’t contact me after agreeing to keep the discussion going and they proved that they won’t amend the errors caused by their clients due to their platform’s lack of information. I’ve learned that not only they won’t take any responsibility, their own support team doesn’t know how the commissions work and they also don’t show any interest to calm down their clients when this things happen.

In the end, Libertex Group has handled this so unprofessionally. I really expected more from them.

I have posted this in Spanish in Twitter and in Linkedin. You can also find this post in Spanish here.

I would be so grateful if you can share this post so everyone can know and be aware of the ghost commissions of Libertex Group.

Thanks for reading!

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